MESA, AZ-An Arizona investor has immediately reinvested proceeds from a $10.51-million sale of a 120-unit multifamily asset into a $12.75-million deal for 238 units. In the first leg of the dealmaking, the seller ended a three-year hold with a gain of slightly more than $2 million.
The seller of record, Palmwood Terrace LP of Payson, exchanged the Colores Del Sol at 510 E. McKellips Rd. for the Sandstone Apartments at 1727 W. Emelita Ave. "He made a good return by selling his property now," Julie Vaughn, vice president with Sperry Van Ness in Scottsdale, tells GlobeSt.com, "and we were able to put him directly into another deal that doubled the size of what he had."
Colores Del Sol's two-week marketing at $10.1 million brought five offers. "People bid up the price on the property because it is beautiful, new, fully occupied with strong financials," Vaughn explains. But the one hurdle to overcome was a HUD loan with two years to go on the lock-out. "If we could have paid off that loan, the price on the property would have been higher. As it was, we were able to attract $400,000 more than the asking price," she adds.
Built in 2000 and situated on 5.78 acres, Colores Del Sol is 97% occupied with one-, two- and three-bedroom units ranging from 715 sf to 1,120 sf. The rents are $600 to $832 per month.
The seller moved the sale proceeds seven miles to the northeast to acquire the fully leased Sandstone Apartments, one- and two-bedroom units measuring 510 sf to 960 sf. Its monthly rents go from $515 to $699. The 20-year-old complex, situated on 8.6 acres, will be a long-term hold for the owner, according to Vaughn.
Vaughn says there were a couple offers on the Sandstone, but it wasn't aggressively marketed. "I knew the buyer was exchanging," she says, "and knew he'd be interested in this."
Vaughn represented Palmwood Terrace as well as the Sandstone's seller, Al Fenstermacher of Irvine, CA. The buyer of Colores Del Sol was T. West Investments LLC of Los Angeles, which had Jerry Palmer with Sperry Van Ness' Ontario, CA at the bargaining table.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.